It is well recognized that "Man works best when he works for himself". Globalization of the economy and comfortable availability of finance to business has made "human talent" as the key differentiator between successful organizations and others. The recognition of Human Capital as the Prime Resource of business organization, has led to fierce competition for attracting, retaining and motivating talent. ESOPs in different forms are the most effective form of synergizing the interests of the employees and corporate entity they work for. It is this synergy which motivates employees to give that indefinable “extra” bringing sustained growth and profitability.

ESOPS Indian Scenario

India Inc has accepted and adopted ESOPS in a manner and to an extent which was unimaginable just 5 years ago. Beginning with the InfoTech Sector, ESOPs have spread across the services and manufacturing sector. Regulatory developments have kept pace with the speed of ESOPs in India. ESOPs related legislation is now part of the Income Tax and Corporate Laws. SEBI has issued revised guidelines on issue of Employee Stock Option Plan in light of continuous evolution in India and abroad. The Institute of Chartered Accountants of India has also come out with a Guidance Note on Accounting for ESOPs.